DOHA: The Gulf petrochemicals industry is bracing to sustain competitiveness keeping in mind the new market realities. Gulf producers are exploring opportunities to expand capacity, diversify production and realise the region’s full potential, the Gulf Petrochemicals & Chemicals Association (GPCA) said here yesterday.
Latest GPCA data show that petrochemicals capacity is continuing to expand in the GCC. Regional capacity grew by 10 percent in 2011, reaching 121 million tonnes per annum. Between 2007 and 2011 regional petrochemicals capacity expanded at 13 percent compounded annual growth rate. At the same time, wage inflation and rising raw materials costs, incurred as the global economy edges out of recession, are having a knock-on effect on the bottom line of the GCC petrochemicals sector, the Association noted.
“The regional industry must continue to work together, more closely than ever, to sustain competitiveness in the face of the new market realities. We are optimistic about the future and aim to achieve growth focusing on technology, innovation and long-term partnerships,” said Dr Abdulwahab Al Sadoun, Secretary General of the GPCA.
Gulf countries currently hold around 20 percent of the world’s proven natural gas reserves. Despite the cost competitiveness of Gulf-based petrochemicals producers built on such strategic assets, experts at the forum urged the industry to prepare themselves for new challenges, especially because a cooling Chinese economy will lead to reduced demand for Gulf exports.
Randy Woelfel, CEO NOVA Chemicals, said shale gas discoveries in North America are adding significant volumes to global energy supplies, which is another area of concern for Gulf producers.
While the shale gas boom in North America promises to provide fresh impetus to petrochemicals producers there, options are getting limited before Gulf producers, as the Eurozone offers limited growth opportunities amidst the current financial crisis.
According to GPCA, Abu Dhabi continues to set the pace for petrochemicals development in the UAE, with sales of $2.7bn in 2011, reflecting 21 percent revenue growth in comparison to 2010. Total output last year was 6m tons, or five percent of the Gulf’s total production of 120m tonnes. Abu Dhabi also adopted an ambitious inorganic growth strategy designed to strengthen its industry’s position in the plastics sector, both in terms of the products portfolio and access to advanced technology.
The success of the 7th Annual GPCA Forum held in Dubai in November 2012, highlighted the Gulf petrochemicals industry’s remarkable growth over the years.
The Forum also provided a platform to showcase the contribution petrochemicals and chemicals to the diversification of local industry and career development for the indigenous workforce.
The Peninsula
